China's latest rural forest reforms have made headways by further devolving the use rights of collectively owned forestland and relaxing government control over private forestry operations. However, there have been policy inconsistencies and conflicts, such as harvest restriction, lack of flexibility in local execution, and takings of devolved forestland without fair compensation. This paper attempts to elucidate the theoretical and practical considerations needed for resolving these and other challenges, which, we argue, crucially hinge on a clear understanding of the advances of institutional economics in such areas as property right, collective action, and transaction cost, and a proper incorporation of the primary features of forest ecosystems and forestry as well as the rural society of China. It is hoped that this effort will contribute to the continued discussion and more effective execution of the tenure reform and institutional change in China and elsewhere.
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Vol. 15 • No. 4